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Factors Setting the Tone for Autodesk's (ADSK) Q1 Earnings

Autodesk, Inc. ADSK is slated to release first-quarter fiscal 2021 results on May 28.

The company anticipates to report revenues between $880 million and $895 million for the fiscal first quarter, indicating year-over-year growth of 23.8%. It projects non-GAAP earnings to be in the range of 80-86 cents per share.

The Zacks Consensus Estimate for fiscal first-quarter 2021 earnings has remained steady at 82 cents per share over the past 30 days. Further, the consensus mark for revenues is pegged at $879.8 million, suggesting an increase of 19.6% from the year-ago quarter reported figure.

Over the trailing four quarters, Autodesk’s earnings beat the Zacks Consensus Estimate on three occasions and missed in the other, the average positive beat being 2.8%.

Let’s see how things have shaped up for the upcoming announcement.

Factors to Consider

Autodesk’s fiscal first-quarter performance is expected to have benefited from robust growth in subscription revenues and rapid adoption of maintenance-to-subscription (M2S) program.

Additionally, strong renewals and strength in new customer billings is expected to have driven top-line growth in the quarter.

Autodesk, Inc. Price and EPS Surprise

Autodesk, Inc. price-eps-surprise | Autodesk, Inc. Quote

Stellar double-digit growth in annual recurring revenues (ARR) for the last four quarters reflects the success of Autodesk’s business-model transition and solid overall growth. This trend is likely to have continued in the fiscal first quarter as well on portfolio strength.

Meanwhile, Autodesk Construction Cloud is gaining traction with owners, general contractors and subcontractors across the construction industry, which is expected to have aided top-line growth in the soon to-be reported quarter.

BuildingConnected’s preconstruction platform is managing an estimated $56 billion worth of project bids each month, with 15 of the top 20 ENR-ranked general contractors using BuildingConnected to manage bidding.

Additionally, PlanGrid, Autodesk’s field collaboration technology, is used on nearly two million projects around the globe. Coupled with BIM 360, more than 1.5 billion drawings are now in Autodesk Construction Cloud.

Moreover, Autodesk’s investment in Aurigo Software is likely to have helped it to fortify its construction business, in turn, bolstering the top line. Aurigo’s integration with Autodesk Construction Cloud, a powerful portfolio of construction management software and services, gives owners a single end-to-end technology platform for design, planning, construction and operations of infrastructure and private assets.

Meanwhile, BIM 360’s machine learning technology Construction IQ is now used monthly by nearly 12,000 project leaders, demonstrating accelerating adoption of Autodesk’s predictive insights to identify, prevent and manage risk.

Nonetheless, sluggish growth in Maintenance revenues due to the continued migration of maintenance plan subscriptions to subscription plan might have negatively impacted top-line performance.

Moreover, spending on software is likely to have declined as commercial IT buyers and consumers implemented rapid cuts in capital spending, in line with declining revenues, profits, market valuations, and employee headcount due to coronavirus-led business uncertainty. The top line is expected to reflect the impact of the decline in spending.

What Our Model Says

According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Autodesk has an Earnings ESP of -3.54% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a few companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:

Nutanix Inc. NTNX has an Earnings ESP of +1.68% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Big Lots, Inc. BIG has an Earnings ESP of +19.01% and a Zacks Rank #2.

Momo Inc. MOMO has an Earnings ESP of +5.75% and a Zacks Rank #3.

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